AMD's Embedded and Semi-Custom To Be A Larger Portion Of Revenue By 2020

Earlier this week, AMD extended its embedded portfolio with the 3rd Generation AMD Embedded G-Series SoC and the Embedded G-Series LX SoC. The new offerings expand developers’ ability to scale x86 platforms with improved performance, power and price. Additionally, the company introduced two new higher performing 3rd Generation AMD Embedded G-Series SoCs, codenamed “Prairie Falcon” and “Brown Falcon, which provide pin compatibility for G-Series processors with the Embedded R-Series SoC. AMD believes that the new lineup will attract a wide range of customers including firms that manufacture smart TVs, IP set-top boxes, casinos, communication networks and industrial control among others. (Read AMD Press Release)

As part of its multi-year effort to transition its business model by diversifying its revenue base, AMD has focused on increasing the revenue contribution from fast growing segments, including semi-custom and ultra-low power processors, professional graphics processors, as well as processors for dense server and embedded solutions. AMD continues to align larger portions of its R&D investments to take advantage of the long-term growth opportunities in the Embedded and Semi-Custom segment, which now accounts for over 50% of the company’s total revenue compared to less than 10% in 2012. We expect the revenue contribution of AMD’s Embedded and Semi-Custom business to increase further over our review period.

The year 2015 was a challenging one for AMD. In addition to weak macroeconomic conditions and declining PC sales, AMD was hit by significant market share loss to Intel in APUs (i.e., Accelerated Processing Units) and Nvidia in GPUs (Graphics Processing Units). However, the company is confident that its long term technology investments and sharpened focus have created a strong foundation for future growth. It expects revenue to grow in fiscal 2016.